Question

In: Finance

An account had $840,000 in it at n=0 the account paid 6% annual interest. Each year...

An account had $840,000 in it at n=0 the account paid 6% annual interest. Each year for 20 years $12000 was withdrawn from the account. What is the amount at n=20, just after the last $12000 withdrawal?

Solutions

Expert Solution

$ 2,252,566.70

Year Beginning Value Interest Withdrawal Ending Value
a b=a*6% c d=a+b-c
1     8,40,000.00      50,400.00 12,000.00     8,78,400.00
2     8,78,400.00      52,704.00 12,000.00     9,19,104.00
3     9,19,104.00      55,146.24 12,000.00     9,62,250.24
4     9,62,250.24      57,735.01 12,000.00 10,07,985.25
5 10,07,985.25      60,479.12 12,000.00 10,56,464.37
6 10,56,464.37      63,387.86 12,000.00 11,07,852.23
7 11,07,852.23      66,471.13 12,000.00 11,62,323.37
8 11,62,323.37      69,739.40 12,000.00 12,20,062.77
9 12,20,062.77      73,203.77 12,000.00 12,81,266.53
10 12,81,266.53      76,875.99 12,000.00 13,46,142.53
11 13,46,142.53      80,768.55 12,000.00 14,14,911.08
12 14,14,911.08      84,894.66 12,000.00 14,87,805.74
13 14,87,805.74      89,268.34 12,000.00 15,65,074.09
14 15,65,074.09      93,904.45 12,000.00 16,46,978.53
15 16,46,978.53      98,818.71 12,000.00 17,33,797.24
16 17,33,797.24 1,04,027.83 12,000.00 18,25,825.08
17 18,25,825.08 1,09,549.50 12,000.00 19,23,374.58
18 19,23,374.58 1,15,402.47 12,000.00 20,26,777.06
19 20,26,777.06 1,21,606.62 12,000.00 21,36,383.68
20 21,36,383.68 1,28,183.02 12,000.00 22,52,566.70

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